How billionaire sports owners use their teams to avoid paying taxes

Figures above reflect adjusted gross income for 2017 and 2018 added together. The tax rates were calculated using the total federal income taxes paid during those two years, including both the employees’ and employers’ share of payroll taxes.
Lucas Waldron/ProPublica

You don’t become a billionaire without exploiting people and that includes not paying your taxes. ProPublica examined the ways sports owners avoid taxes via their teams and while it isn’t surprising, it’s still disgusting.

Referencing a match in 2019 between the Clippers and the Lakers, Robert Faturechi, Justin Elliott and Ellis Simani looked at the difference in income between LeBron James and Steve Ballmer, owner of the Clippers:

In his tax return, James reported making $124 million in 2018. He paid a federal income tax rate of 35.9%. Not surprisingly, it was more than double the rate paid by Avila.

The wealthiest person in the building that night, in all likelihood, was Steve Ballmer, owner of the Clippers. The evening was decidedly less arduous for the billionaire former CEO of Microsoft. He sat courtside, in a pink dress shirt and slacks, surrounded by friends. His legs were outstretched, his shoes almost touching the sideline.

Ballmer had reason to smile: His Clippers won. But even if they hadn’t, his ownership of the team was reaping him massive tax benefits.

For the prior year, Ballmer reported making $656 million. The dollar figure he paid in taxes was large, $78 million; but as a percentage of what he made, it was tiny. Records reviewed by ProPublica show his federal income tax rate was just 12%.

That’s a third of the rate James paid, even though Ballmer made five times as much as the superstar player. Ballmer’s rate was also lower than Avila’s — even though Ballmer’s income was almost 15,000 times greater than the concession worker’s.

12% vs 35.9% when we’re talking single or double digits is relatively small. But when we’re talking millions, that’s national GDPs worth of tax not being paid.

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